Recently took a short off the 114.50 handle on this pair and covered in to the 112.00 handle.
114.50 is a huge resistance area and has capped price since 2017. I do believe that if the US equity market stabilizes around its 200DMA and makes a new ATH, USDJPY will break the 114.00 area.
With US10Y yields rising, US rate differential with JPY at 2.35% and on track to increase in Dec if/ when Federal Reserve hike interest rates another quarter percent. Looking at the spread between USTs and JGBs is also trending higher which is heavily correlated to this market.
The only thing holding this market back is the recent risk off sentiment in the market. As global risk sentiment steady's, USDJPY is catching a bid this morning on safe haven out flows, reclaiming the 112.00 handle.
Technicals...
Clear trend pullback entry off of a secondary pullback. 4th test of a powerful trend line, its also fib618 from the July low, its the 112.00 handle, horizontal level of support and the trade offers 5 to 1 returns back up to the 114.50 area with a 50 pip stop loss.
Looking for a long around 112.00 stop 111.50
114.50 is a huge resistance area and has capped price since 2017. I do believe that if the US equity market stabilizes around its 200DMA and makes a new ATH, USDJPY will break the 114.00 area.
With US10Y yields rising, US rate differential with JPY at 2.35% and on track to increase in Dec if/ when Federal Reserve hike interest rates another quarter percent. Looking at the spread between USTs and JGBs is also trending higher which is heavily correlated to this market.
The only thing holding this market back is the recent risk off sentiment in the market. As global risk sentiment steady's, USDJPY is catching a bid this morning on safe haven out flows, reclaiming the 112.00 handle.
Technicals...
Clear trend pullback entry off of a secondary pullback. 4th test of a powerful trend line, its also fib618 from the July low, its the 112.00 handle, horizontal level of support and the trade offers 5 to 1 returns back up to the 114.50 area with a 50 pip stop loss.
Looking for a long around 112.00 stop 111.50